Level Of Capital Formation Research Articles

Infrastructure Development and Economic Growth in East Africa: Quantity versus Quality Dimensions Using Panel-ARDL Approach

Infrastructure development is one of the key drivers for economic growth. As a result, dealing with the quantity and quality dimensions of infrastructure development has attracted the interest of researchers in recent times. The main objective of this study is to investigate the relationship between infrastructure development and economic growth in both quantity and quality dimensions. The study employs Panel Autoregressive Distributed Lag (PARDL) method. The results of the study reveal that infrastructure development quantity has a positive and significant effect on economic growth. The results show that in the long run, a one unit rise in the African Infrastructure Development Index (AIDI) leads to an increase in economic growth of 0.31%, on average; while in the short run, a one unit rise in the African Infrastructure Quality Index (AIQI) boosts the economic growth by 1.4%, but in the long run it decreases the GDP per capita by 1.99 percentage points. The interaction result shows that the relationship between infrastructure development and economic growth depends on the level of capital formation in East African countries. The elasticity result shows that gross capital formation has a larger marginal effect on economic growth in countries with a high AIDI and vice versa. Finally, the study recommends that East African countries should adopt strategies and policies that will increase the quantity and quality of infrastructure development, as well as a capital formation strategy accompanied by human capital development and high institutional quality.

ANALISIS PENGARUH TINGKAT PENDAPATAN PERKAPITA DAN PEMBENTUKAN MODAL TERHADAP PEREKONOMIAN DI PROVINSI JAMBI TAHUN 2016-2020

This study aims to determine whether there is an effect of the level of income per capita and the level of capital formation on the economy in Jambi Province during the period 2011-2020. The research method used is a descriptive quantitative approach, the type of data used in this study is secondary data obtained from related agencies which are then processed using SPSS.25 software through tests related to research needs. The results of the study indicate that there is a positive and significant effect between per capita income and formation on ADHK GRDP in Jambi Province during 2011-2020 either partially or simultaneously. The magnitude of the influence given by Per capita Income and Capital Formation on GRDP ADHK is 68.7%.

الجامعة المستنصرية / كلية الادارة والاقتصاد

The research aims to show the impact of governance indicators in Iraq on investment policy decisions and procedures, by measuring the relationship between governance indicators and the level of capital formation, which expresses the efficiency of government investment spending performance using the (ARDL) model. The research concluded that there is a direct and significant relationship between the indicators and standards of investment policy governance and the level of capital formation, which means that improving the indicators of governance in investment policy contributes to providing a suitable environment for the completion and implementation of investment programs and projects, which leads to raising the efficiency of the performance of government investments.

Relationship between lending interest rate, inflation rate and capital formation in Kenya

The study seeks to understand the relationship between lending interest rate, inflation rate and capital formation in Kenya. Time series from World Bank for the 1988 to 2018 is employed. Development of literature is guided by expectation theory, classical theory of interest rate and the institutionalist theory of capital formation. The study finds capital formation, lending interest rate ad inflation rate time series data to be stationary at the 5% level of significance. This leads to the checking of the lag order used and estimating of VAR model. The results indicate that, current year’s; capital formation, inflation rate and lending interest rate are insignificant in determining next year’s level of capital formation. First lag of inflation rate is found positively significant in influencing lending interest rates as well as the first lag of lending interest rate is found significant on influencing itself. Capital formation first lag is found to be negatively significant in determining inflation rate. Lastly, inflation rate first lag is found to be positive

Effect of Deposit Mobilization and Credit Financing of Commercial Banks on Capital Formation in Nigeria

The low level of Capital formation in Nigeria has been blamed on the low level of savings occasioned by the low income level and high level of consumption which reduce the ability of banks to create money through intermediation. This study investigates the effect of deposit mobilization and credit financing of commercial banks on capital formation in Nigeria. Gross fixed capital formation was used as proxy for dependent variable, while credit to private sectors, lending rate and Total deposit liabilities were used as proxies of independent variables. The study employed time series quarterly data from Q1 1980 to Q4 2015, which constitutes 48 observations. Multiple regression techniques were used to analyze the data. The study found that (LRN and TDL) have positive impact on GFCF of Nigeria while credit to private sector has an inverse relationship with GDP. In view of this finding, the study recommended that Nigeria commercial banks should re-direct their intermediation activities effectively.
 JEL Classification: C22, C87, G2, G21, G29

Foreign Direct Investment and Technological Capabilities: The Relevance of the East Asian Experience for Pakistan

This paper makes the case for a vigorous policy thrust to support investment-led growth. Pakistan’s economy has not maintained a sufficient level of capital formation to sustain growth over the long term. Two thirds of current growth is driven by consumption and not investment: this needs to be turned around. The government needs to put in place an investment regime that motivates and induces industry to invest, innovate, and reinvest. Foreign direct investment can play an important role in strengthening the country’s investment rates. There is also need for deliberate polices to boost technological capabilities in the enterprise sector. In this context, East Asia – which successfully created a dynamic process of capital formation and technological learning that upgraded its productive capacity and underpinned export success – holds important lessons for Pakistan.

FDI, Trade Openness, Capital Formation, and Economic Growth in Bangladesh: A Linkage Analysis

This paper examines the linkage between FDI, trade openness, capital formation, and economic growth rates inBangladesh over a period 1986 to 2008 using time series analysis. All variables are found stationary at firstdifferencing both at constant and constant plus trend level under the ADF and PP stationary tests. TheJohansen-Juselius procedure is applied to test the cointegrating relation between variables followed by a vectorerror correction model. The empirical results trace a strong long-run equilibrium relationship between GDPgrowth rates and the explanatory variables with unidirectional casual flows. The volume of FDI and level ofcapital formation are found to have significant positive effect on changes in real GDP. The degree of tradeopenness unleashes negative but diminishing influence on GDP growth rates. We conclude that Bangladeshshould formulate FDI-led polices and ensure higher degree of capital formation to enhance her economic growthrates at large.

Is the Social Action Programme in Pakistan Financially Sustainable?

Earlier neoclassical, classical, or structuralist theories [due to Rostow (1960)] considered economic growth to be a result of the right quantity and combination of saving, investment, and foreign aid, with surpluses from the primary commodityproducing sectors being channelled into capital for further growth. Accordingly, the main constraint in these growth models has been the relatively low level of capital formation available. While the above paradigm has intuitive appeal, it, however, ignores the complementarity of social-political influences on the physical variables (i.e., capital, labour, etc.) in growth and development. Urquidi (1971) argued that the social progress of a nation is a necessary condition for sustained economic growth. It is now increasingly evident that the investment in the social sectors-primary education, basic health, housing, changes in land-tenure system, social security, better social relations-are as, if not more, important than the investment in the commodity-producing sectors or related infrastructure. In this context, Lloyd-Ellis (1993) noted:

Transport Capital Formation and Economic Growth on Teesside, 1820–50

Before 1850 economic growth on Teesside was associated with heavy investment in transport facilities which supported a rapid expansion of the region's coal shipping trade after 1830. The spread of railways throughout the region and the growth of the shipping trade encouraged an increase in the number of firms engaged in shipbuilding, iron manufacture, and engineering. New towns sprang into existence and old-established centres of industry, trade and commerce experienced an upsurge of activity as population grew in response to expanding local employment opportunities. Regional population inflow was particularly heavy in the 1830's. Economic growth during this period appears to have occurred within the framework of two long fluctuations in constructional activity, the first beginning in 1820 and reaching a peak in the early 1830's, and the second beginning in the years 1835-36, with the peak coming in 1840. The rapid economic growth experienced by the region is underlined by the sustained rise in the trend of investment activity throughout the period, so much so that even during the difficult years 1842-44, when the economy was severely depressed, the level of capital formation in the region was relatively well maintained. -from Author

The Philippines: Priorities and Prospects for Development

The outlook for the Philippine economy during the next decade is heavily influenced by recent economic events, which resulted in policies for internal development that introduced a distinct change of direction into the economy. The development task facing the government is to lay the foundation for future growth that the economy can achieve in the rest of this century. The economy will be dependent upon foreign inflows to finance prospective balance of payments deficits, which will be larger as a result of decisions to finance a higher level of capital formation. Projections are based upon assumptions concerning future prospects for exports and price trends for both exports and imports. Development will be concentrated in the industrial sector, including: (i) large resource-based industrial projects with a substantial increase in the power program; (ii) import substitution involving industrial projects for the production of intermediate and capital goods; and (iii) expansion of manufacturing production for export. Other aspects are the expansion of public investment in infrastructure and provision of public services. Three areas of particular importance will be education, health, and family planning.

Incidence of an interest income tax

Recent analyses of the corporation income tax have tended to concentrate either on short-run shifting through market imperfection9 or on the shifting of capital between the incorporated and unincorporated sectors.2 Little attention has been paid to the impact of this tax on saving propensities and the level of capital formation. Similarly, analyses of the personal income tax have not fully explored the long run effect of continual taxation of the return to savings on the growth of an economy. As a partial filling of this gap, using a simple competitive growth model, this paper explores the differential incidence of an interest income tax rather than lump-sum tax levied on the same taxpayers.3 Savings are assumed to satisfy maximization of individual lifetime utility functions while production conforms to an aggregate neoclassical production function. Individuals are presumed

Income Distribution and Tax Policy in Colombia

Taxation in a developing country is not only a means of providing public savings and of correcting imperfections in the price system, it is also usually conceived of as a major means of effecting any income redistribution thought desirable. role of taxes in achieving economic equality is sometimes considered even in the poorest countries to be as important as their role in achieving economic growth. This question deserves special attention since many see a necessary conflict in the degree to which these two goals can be achieved-a conflict well expressed by W. Arthur Lewis: The less developed countries have awakened into a century where everybody wishes to ride two horses simultaneously, the horse of economic equality, and the horse of economic development. USSR has found that these two horses will not go in the same direction, and has therefore abandoned one of them. Other less developed countries will have to make their own compromises.' central concern here, of course, is the effect of income redistribution on the level of capital formation. In order to appraise the tax structure of any country, one must therefore have at least some idea, in quantitative terms, of the distribution of income-preferably both by income classes and by factor shares. This knowledge is particularly important when the government must decide on the distribution of tax increases, as is almost certain to be essential in Colombia, as in most developing countries, in the near future. While information on income distribution is no better in Colombia than in other poor countries, fortunately enough data exist to serve as a first step in the appraisal of the appropriate distributional role of the tax system. great inequality of income by income classes is strikingly evident in the 1961 figures carefully assembled by a recent Joint Tax